The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.
The plant operation prior to the privatization was less than ideal in respect of attention to environmental and occupational health and safety performance. The past performance can therefore only be used as a reference point against which the effect of implementing of the necessary upgrades can be measured. Since the take over Ispat/Annaba has intensively worked on bringing existing but non-functioning environmental control system in operation. Reactivating existing non-functioning system has allowed for evaluating such system and setting up priority plans for final upgrades or installation of alternative systems as appropriate.
A number of air emission control systems has successfully been brought up to standard and will continue to operate satisfactorily. Other systems are either not able to achieve the needed standards or are completely missing. Some of the most significant air emission improvements in the project program will be linked to:
gas leakage control at the coke batteries, where leaking doors will be replaced,
commissioning of an ammonia distillation unit for coke oven gas treatment,
utilization of the coke oven gas instead of flaring,
improved dust control at the sinter plant operations,
upgrade of dust control systems on the blast furnaces and utilization of the blast furnace gas instead of flaring,
rehabilitation of dust control systems at the steel shops,
installation of emission control on the Electric Arc Furnace (EAF),
rehabilitation and improvement of lime plant dust control systems, and
establish and operate a general and overall emission control system.
The wastewater treatment systems have been reviewed and rehabilitation and upgrade plans have been developed to remediate deficiencies. The most important upgrades are linked to:
rehabilitation and improvements to the biological treatment plant at the coke oven batteries, with special emphasis on phenol control,
rehabilitation of gas treatment system water circuits,
rehabilitation of water circuits and treatment facilities at the cold and hot rolling mills, and
establish and operate a general and overall discharge control system.
The slag crushing and separation systems as well as the scale handling will be improved to maximize recycling and reduce the volumes of slag currently stored at the plant.
Optimizing the operation and not least utilizing the coke oven and blast furnace gasses will reduce the green house gas emissions from the plant significantly. A precise measure of the reduction can only be given once the recovery systems have been finally designed.
Occupational health and safety has in the past been characterized by accident frequencies around 30 LDA/MMH (Lost Day Accidents/Million Man-Hours). This is high and Ispat has since the takeover focused on improving this performance parameter. The accident frequency was for the first semester of 2002 reduced by 50%, and the company has now established a clear goal of reducing the accident frequency by a factor of 5 by year 2007.
Ispat management has a strong social commitment and has agreed not to downsize for a minimum period of 4 years. This means that retrenchment is not necessary, however, downsizing may occur due to natural attrition. Ispat currently has a workforce of 9,800. During the four years, the plan is to optimize and increase production and thereby make any need for retrenchment or future downsizing unnecessary (preserving much-needed employment in Annaba). IFC has since 1995 followed a similar privatization with Ispat in Kazakhstan and Ispat has proven in this project its willingness and ability to maintain a strong social role in the long-run. Ispat must follow Algerian labor laws and Ispat also has a "règlement intérieure" (internal labor code) taken and improved from Sider''s previous code (this was last updated in 2002 and is in line with Algerian law and international best practice). Employees at Sider, and now Ispat Annaba, have a union (UGTA: the national union for workers). Employees of Ispat Annaba sit on the Board of the Union and the union negotiates with the sponsor regarding salaries, etc. Its bylaws are governed by Algerian laws/statutes. Since privatization the Union has worked closely with Ispat Annaba (and was one of the key sponsors/advocates of the privatization even backing it up with press conferences and consultation meetings to help the workers understand what was happening). The Union will continue to be the key interlocutor between workers and Ispat management regarding labor issues, including salary. A canteen is on-site and workers are given 140 dinars per day for meals. A health clinic is located on-site with doctors and well-trained staff. Each worker is provided an annual check-up (coke oven workers receive a check-up twice/year).
As Ispat Annaba is an existing facility with no new land take, none of IFC''s social safeguard policies were triggered (e.g, there was no land acquisition requiring resettlement). However, in line with Algerian law there was already existing social, labor/employment and community interaction infrastructure. Employees have formed a participation committee. This organization belongs to the workers and workers are elected to its board. The participation committee manages funds that workers provide from their salaries (3% per month) and these funds are codified by “le Droit du Travail d’Algérie”. A certain percentage is distributed to the national social security fund (CNAS) and for insurance. The funds that are left over are distributed to the participation committee, which then uses the funds for local community and social infrastructure. These funds assist 2-3 wilayas (districts) with such things as schools, sports, libraries and cultural centers. The budget for 2002 was 8 million dinars (nearly 800 dinars per worker per month) and the funds are audited. All social development activities have been subcontracted by a SIDER affiliate (not part of Ispat): EGIS, or Social Enterprise Management Infrastructure. Members of Ispat’s Participation Committee sit on EGIS’ Board (these have a controlling vote on the panel so they can direct where the money is spent). IFC has impressed to Ispat that they should understand fully what EGIS does and to work closely with EGIS and the participation committee in order to understand, complement and support its activities.
The facilities are to a large extent equipped with PCB containing transformers. This PCB will, over time, need to be removed and disposed of safely. Ispat and IFC will work with international expertise to ensure this removal and disposal is carried out in accordance with international practice.
The steel plant has an environmental department and the ultimate outcome of the environmental initiatives initiated will be an Environmental Management Systems covering the complete operation. It has not been decided if the system has to be internationally certified, but the plant is currently holding staff trained to do so.
Although IFC is not currently contemplating investing in the Ispat/Tebessa iron ore mining company a parallel environmental upgrade plan has been developed and committed to by the Ispat Management. The agreed mining operation upgrades include rehabilitation plans for deposited inert materials, dust suppression (all operations are dry), and safety performance improvements in line with those at the steel plant.
On March 10, 2003, the sponsor disclosed the ERS locally through advertisements in the the two following newspapers: L''Est, published in French, and Akher Saa, published in Arabic.
